An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European Union
Our study examines the dynamic relationship between financial development and environmental degradation in the European Union (EU) in a panel VAR (Vector Autoregressive) methodological framework over the period 1996-2018. Panel causality tests and impulse response functions show that financial de...
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| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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Editura ASE
2022-08-01
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| Series: | Amfiteatru Economic |
| Subjects: | |
| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_3131.pdf |
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| _version_ | 1850256850838093824 |
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| author | Alexandra Horobeț Irina Mnohoghitnei Dan Gabriel Dumitrescu Ștefania Cristina Curea Lucian Belașcu |
| author_facet | Alexandra Horobeț Irina Mnohoghitnei Dan Gabriel Dumitrescu Ștefania Cristina Curea Lucian Belașcu |
| author_sort | Alexandra Horobeț |
| collection | DOAJ |
| description | Our study examines the dynamic relationship between financial development and
environmental degradation in the European Union (EU) in a panel VAR (Vector
Autoregressive) methodological framework over the period 1996-2018. Panel causality tests
and impulse response functions show that financial development contributes to higher carbon
emissions, although this effect is stronger in the short run and weaker in the long run. At the
same time, financial institutions development is the major contributor to fostering increased
environmental degradation instead of financial markets, which points towards an engagement
of financial institutions towards offering financial products that led to environmental
degradation and/or lagging financial markets in terms of promoting environmentally-related
securities and ESG principles. By providing new insights into the relationship between
financial development and carbon emissions, we hope to assist EU policymakers and
businesses in reconsidering the role of financial development as an effective means of
decreasing environmental degradation in the region. |
| format | Article |
| id | doaj-art-3aae6e3b90ec43eb85d55f30d82d6fc1 |
| institution | OA Journals |
| issn | 1582-9146 2247-9104 |
| language | English |
| publishDate | 2022-08-01 |
| publisher | Editura ASE |
| record_format | Article |
| series | Amfiteatru Economic |
| spelling | doaj-art-3aae6e3b90ec43eb85d55f30d82d6fc12025-08-20T01:56:34ZengEditura ASEAmfiteatru Economic1582-91462247-91042022-08-012461613 62910.24818/EA/2022/61/613 An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European UnionAlexandra Horobeț0https://orcid.org/0000-0001-5821-0244Irina Mnohoghitnei1https://orcid.org/0000-0002-7682-0756Dan Gabriel Dumitrescu2https://orcid.org/0000-0001-7839-3164Ștefania Cristina Curea 3https://orcid.org/0000-0002-0561-4330 Lucian Belașcu4https://orcid.org/0000-0002-7711-3746Bucharest University of Economic Studies, Bucharest, RomaniaBucharest University of Economic Studies, Bucharest, RomaniaBucharest University of Economic Studies, Bucharest, RomaniaBucharest University of Economic Studies, Bucharest, Romania“Lucian Blaga” University of Sibiu, RomaniaOur study examines the dynamic relationship between financial development and environmental degradation in the European Union (EU) in a panel VAR (Vector Autoregressive) methodological framework over the period 1996-2018. Panel causality tests and impulse response functions show that financial development contributes to higher carbon emissions, although this effect is stronger in the short run and weaker in the long run. At the same time, financial institutions development is the major contributor to fostering increased environmental degradation instead of financial markets, which points towards an engagement of financial institutions towards offering financial products that led to environmental degradation and/or lagging financial markets in terms of promoting environmentally-related securities and ESG principles. By providing new insights into the relationship between financial development and carbon emissions, we hope to assist EU policymakers and businesses in reconsidering the role of financial development as an effective means of decreasing environmental degradation in the region. https://www.amfiteatrueconomic.ro/temp/Article_3131.pdffinancial developmentcarbon emissionsfinancial marketsfinancial institutionseupanel varimpulse response |
| spellingShingle | Alexandra Horobeț Irina Mnohoghitnei Dan Gabriel Dumitrescu Ștefania Cristina Curea Lucian Belașcu An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European Union Amfiteatru Economic financial development carbon emissions financial markets financial institutions eu panel var impulse response |
| title | An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European Union |
| title_full | An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European Union |
| title_fullStr | An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European Union |
| title_full_unstemmed | An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European Union |
| title_short | An Empirical Assessment of the Financial Development – Environmental Quality Nexus in the European Union |
| title_sort | empirical assessment of the financial development environmental quality nexus in the european union |
| topic | financial development carbon emissions financial markets financial institutions eu panel var impulse response |
| url | https://www.amfiteatrueconomic.ro/temp/Article_3131.pdf |
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